Aged care shares dive as Morrison calls inquiry
SHARES in aged care providers have plummeted after Prime Minister Scott Morrison announced a royal commission into the scandal-hit sector.
Mr Morrison announced an inquiry on Sunday following what he called an “alarming and disturbing” spike in elder abuse and poor standards in the industry.
Estia Health welcomed the move but its shares and those of ASX-listed rivals Japara Healthcare and Regis Healthcare fell about 15 per cent in early trade yesterday, while shares in Aveo Group also took heavy hits.
Estia chief executive Norah Barlow said the company would engage with the government and welcomed scrutiny.
“We will continue to work with government to build a viable sector that older Australians deserve,” she said in a statement.
A royal commission is needed to understand the full ex-
tent of problems in the aged care sector, the Prime Minister said.
“It’s not just in the profit or the not-for-profit sector, it’s not just in rural centres or urban centres or large centres or small centres,” Mr Morrison told the Nine Network.
“Our work shows that there is a problem potentially and actually in each of these areas, so we want to get to the bottom of it.”
Audits at some facilities have revealed a dramatic increase in non-compliance and abuses in the aged care sector.
There was a 177 per cent increase in the number of aged care homes at which a serious risk to residents was identified in the past financial year. The royal commission will look at the quality of both residential and home aged care.
Estia and Japara shares closed down 18 per cent and 17 per cent at $2.40 and $1.39 respectively.
Regis and Aveo shares fell 17 per cent and 7.2 per cent to $3 and $2.06.